=Paper=
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|storemode=property
|title=Business Patterns for Product Development
|pdfUrl=https://ceur-ws.org/Vol-610/paper05.pdf
|volume=Vol-610
|dblpUrl=https://dblp.org/rec/conf/europlop/Kelly08
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==Business Patterns for Product Development==
https://ceur-ws.org/Vol-610/paper05.pdf
Business Design Patterns for Product Development 12-May-09
Business Patterns for Product Development
(EuroPLoP 2008)
Allan Kelly - http://www.allankelly.net
1 Abstract
This paper introduces four patterns for use by software development
companies, predominantly independent software vendors (ISVs), for growing
their business and creating new products. Starting with a single product
company these patterns describe how product and services are added to the
market offering to create a whole product and then a company with a product
portfolio. The product roadmap is introduced as a planning tool for product
growth and enhancement.
The patterns presented here are:
• SINGLE PRODUCT COMPANY – When time and resources are scarce, focus
all your attention on developing and marketing one product.
• WHOLE PRODUCT– Provide additional products and services so customers
are able to recognize the promised value from the product.
• PRODUCT PORTFOLIO – Managing your products as a portfolio.
• PRODUCT ROADMAP– Create a product roadmap to show a vision for the
future.
2 Audience
These patterns are intended to codify several common business practices in a
pattern language so that they may be better understood, communicated and
studied. Within existing companies many of these patterns already exist,
albeit as tacit knowledge or embedded in operating practices.
The patterns given here are intended for those creating and applying
corporate strategies. This group includes, existing managers, future managers
and entrepreneurs as well as those studying to take on such roles.
In particular it is hoped that those on the receiving end of such strategies and
tactics will find these patterns informative and useful. Understanding what a
company is attempting, why it is acting and the implications can be benefit
everyone in the organization.
Proceedings of the 13th European Conference on Pattern Languages of Programs
(EuroPLoP 2008), edited by Till Schümmer and Allan Kelly, ISSN 1613-0073 .
Copyright © 2009 for the individual papers by the papers' authors. Copying permitted
for private and academic purposes. Re-publication of material from this volume
requires permission by the copyright owners.
(c) Allan Kelly 2007 – www.allankelly.net Page 1 of 24
Business Design Patterns for Product Development 12-May-09
The patterns in this paper, and others in the series (Kelly 2005a, b, 2006,
2007a, b) may be read and applied outside the domain of software
companies. They may be applied to technology companies in general and to
non-technology companies in some instances. The author has chosen to
confine the domain and context of these patterns to software companies for
two reasons. Firstly this is the domain the author knows and has experience
in. Secondly, limiting the domain helps maintain the brevity of the patterns.
Despite these deliberate limitations the author believes many of these
patterns may be applied in contexts outside the software domain.
In parts the patterns draw on existing research and literature. Inevitably these
patterns represent the author’s understanding and views on how companies
should go about tackling the problems identified. While there are no right
answers to these problems - indeed some out dispute the problems identified
– it is hoped that these patterns can help expand the understanding of
business strategy in the technology domain.
3 The Patterns
Figure 1 - Pattern sequence
(c) Allan Kelly 2007 – www.allankelly.net Page 2 of 24
Business Design Patterns for Product Development 12-May-09
SINGLE PRODUCT When a company is starting there are so many things to
COMPANY do. Focus all your attention on a single product. Get
Page 4 this product right and get it selling before moving onto
other products.
WHOLE PRODUCT Customers buy your product to solve a problem but
Page 8 solving the whole problem requires more than just your
product. Therefore sell your product with everything
needed to solve the whole problem.
PRODUCT As a company grows it will offer more and more
PORTFOLIO products but this makes it difficult to focus. Consider
Page 15 all your products as a portfolio. Balance the portfolio to
achieve your corporate objectives.
PRODUCT ROADMAP Customer and co-workers need to know what will be in
Page 16 future versions of the product. But you need to be able
to change what features are included and when. So
create a roadmap that shows future features with
approximate dates. Use the roadmap to solicit views
and revise the roadmap. Keep the roadmap as a living
document.
CORE PRODUCT Reduce costs by only supplying the core product,
ONLY anything extra should be billed separately.
(Kelly 2005a)
SIMPLE PRODUCT Product variations allow you to differentiate your
VARIATIONS product from competitors and provide your customers
(Kelly 2005a) with a choice they value. But variations can be
expensive to produce and support; therefore, offer
simple variations on the product, e.g. choice of colours.
CONTINUING Complex products often require continuing maintenance
SERVICES FOR and support. The company that makes the product
PRODUCT already knows a lot about it, and so is well placed to
(Kelly 2005b) perform this activity too. By sharing knowledge
between services and products operations, both can be
improved.
CUSTOMER PO- Ensure your product will do what your customers want
CREATED P RODUCT by enrolling customers in your development process.
(Kelly 2007b) This gives them an opportunity to influence the product
design and implementation.
SAME CUSTOMER, It is easier to sell to existing customer than it is to find
DIFFERENT and sell to new customers. Therefore have additional
PRODUCT products you can sell to your existing customers.
(Kelly 2007b)
(c) Allan Kelly 2007 – www.allankelly.net Page 3 of 24
Business Design Patterns for Product Development 12-May-09
3.1 SINGLE PRODUCT COMPANY
Figure 2 - 1908 Model-T Ford
After several iterations Henry Ford finally found a commercial
success with the Model-T Ford. The Ford Motor Company initially
focused on just producing this one car and, famously, in one colour
only: Black.
Context You have identified a need in the market and have decided to start a
company to address the need. You believe the need is best satisfied
by a product rather than a service, so will not use SERVICES BEFORE
PRODUCT (Kelly 2005b).
Problem When you start a product company what do you do first?
Forces When you start a company the world is our oyster. There are
countless opportunities for new products and vast untapped markets.
Companies are normally brought into being to do something
specific. To address need in the market, an opportunity with a
specific customer or exploit a new technology. But there are many
ways you can go about addressing something, it is hard to know
where to start, and even harder to know whether you are addressing
it in the right way.
There are many things a new company has to do: legal status,
accounts systems, recruitment, customer accounts, etc. etc. but the
company founders only have so much time, energy and money to
devote to all these issues. All companies have limited resources and
new companies are more limited than most.
Solution Decide on one product and focus all your attention on
developing the product, delivering the product and marketing
the one product. Bring this product to market as quickly as
possible.
Ask the question: “What is stopping us from delivering this product
tomorrow?” Direct your time, energy and money at resolving the
issues identified by this question.
Identify your target market and target customers as early as possible.
Engage with them before the product is finished, they may be happy
to offer advice, to beta-test the product, or act as a lead customer -
(c) Allan Kelly 2007 – www.allankelly.net Page 4 of 24
Business Design Patterns for Product Development 12-May-09
see CUSTOMER CO-CREATED PRODUCT (Kelly 2007b).
Ensure your target customers can pay for the product one way or
another. You may sell the product in a single transaction, or charge a
monthly fee or offer your product for free and sell advertising
around it. However you decide to monetarise your product make
sure the revenue will cover your costs and give enough profit to
justify the investment.
When the chosen market is large, and the problems to be solved are
many, then define your own niche to improve your focus.
Deliberately put some opportunities out of bounds. By defining the
part of the market you will address you will improve your own focus
and reduce the amount of time you need to deliver a product.
Having a clear idea of who your target market is, and what you have
to offer should make it clearer to communicate your marketing
message.
Focus on the core problem the product is solving, limit extra activity
and work on both the product and the company as a whole. Leave
extra functionality out of the product and limit the growth of the
company organization. Defer non-essential activities like setting up
a human resources department, or look to do them differently,
maybe rent services or outsource work.
While developing your product avoid the distraction of offering
services, avoid the temptation to develop additional products. Focus
on your market, focus on the product you are developing, focus on
your potential customers.
When your product is available this advice no longer holds. You
may need to supplement your offering with services or additional
products as described in WHOLE PRODUCT and from there to
PRODUCT PORTFOLIO.
There is no guarantee that your first product will be the right one.
While researching the market, building the product or even after
product launch you might identify a more interesting prospect and
decide to change focus. Consider using EXPEDITIONARY
MARKETING (Kelly 2004), to help refine your product ideas.
Once established most companies relax their focus on the single
product. They may add additional products and services around the
original product (as in WHOLE PRODUCT) or they may diversify with
new products – see SAME CUSTOMER, DIFFERENT PRODUCT (Kelly
2007b) and PRODUCT PORTFOLIO.
Consequences Knowing what single product you are producing, and what single
problem you are solving will make it easier to focus your resources
and limit distractions.
By keeping features and functionality to a minimum you can reduce
development costs and shorten the development cycle. However
this means the features you do implement need to be the right ones
to make your product attractive.
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Business Design Patterns for Product Development 12-May-09
Focusing on the product will detract from building the company
organization and infrastructure. In the short term the company needs
the product – and the resulting revenue – more than it needs the
infrastructure of human resource departments, public relations and
such. But such capabilities too long can have negative
consequences. Companies may work sub-optimally if new business
units and functions are not created when they are needed. For
example, a dedicated technical support desk may be a distraction at
the start but when there are many customers it is more disturbing to
have engineers answer queries directly.
Similarly, once the product is established and revenues are flowing
companies need to consider supplementary and additional products.
Delaying new products may leave opportunities for competitors to
enter the market. Use Whole Product and Product Portfolio, and
product services like PRODUCTS WITH SERVICES (Kelly 2006),
START-UP SERVICES FOR PRODUCTS and CONTINUING PRODUCTS FOR
SERVICES (Kelly 2005b).
Marketing is easier when your (new) company name is associated
with one product, e.g. Hoover in Europe and Q-Tips in the USA.
Companies which do not expand their product portfolio are often
acquired by large companies where they form part of a portfolio.
Variations Companies that do not follow this strategy from the beginning can
still adopt this strategy later. In order to create focus shed additional
products, withdraw from non-core markets and decline customer
business outside the core area. Review employee incentives to
ensure everyone is focused on the same thing. It is no use focusing
on quality if engineers are still given bonuses for solely making
delivery dates.
Focus need not be product related, although for software companies
it usually is. Companies may focus instead on particular customer
and their needs, or specialist activities.
In some markets it customers may expect to buy a set of similar
products. For example, a customer buying a lipstick may expect to
buy matching nail-tarnish, if they cannot then they may by nothing.
Generally this is not the case for software companies.
Examples Most start-up companies pass through a single product period in
their early days. Originally Apple only sold the Apple II computer
while Intuit started with Quicken alone.
Henry Ford is famous for offering his customers “Any colour they
like so long as it is black”. Early Ford operations were totally
integrated and focused on producing one car in one colour. This
helped Ford to enter and dominate the early motor business but also
provided opportunities for competitors. However this strength was
also Ford’s weakness. By offering customers choice in the product
General Motors was able to compete with Ford.
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Business Design Patterns for Product Development 12-May-09
Also known -
as
Related work CORE PRODUCT ONLY and SIMPLE PRODUCT VARIATIONS (Kelly
& Sources 2005a) describe how to manage costs by focusing on a single
product and how increase revenue with additional sales or variations.
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Business Design Patterns for Product Development 12-May-09
3.2 WHOLE PRODUCT
Figure 3 - The whole product doughnut
In the 1980’s Silicon Graphics (SGI) set out to target the Hollywood
post-production film editing process. Rather than emphasis the raw
power and all-round capabilities of their machines SGI specifically
presented their machines as video image editors. They added
features such as video device interface ports to their machines to
make their product superior to competitors for this specific task.
Context Your first products are in the market and have sold well to early
adaptors. There is more to using the product that plug-and-play.
Problem How do you ensure technical products deliver value to
customers?
Forces New technology is cool in its own right, it may be used in many
ways and produce many benefits. But using the technology to
address real world problems requires work. Some customers (early
adopters) are prepared to buy the core technology and make it work
for them. But many more potential customers are not prepared, or
able, to put in this effort so will not buy your technology.
You wish to expand your market beyond the technical savvy early
adaptors, but your product is complicated, those individuals or
organizations without technical know how will find it difficult to
recognize value from the product.
The value of your product can only be recognised when it is used in
conjunction with specific hardware or additional software; when
people are trained in the system, when the product is integrated with
existing systems, when processes are changed. Each of these
additional requirements put obstacles in the way of sales and
customers seeing the full value of your product.
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Business Design Patterns for Product Development 12-May-09
Competitors offer products that can match, or even better, your
products in many tasks. Your competitors may even have
advantages over you, they may have a respected brand name or their
technology may be better.
Some markets may not be aware of how your technology can
improve their work. Even if they are aware they need to bring
together and integrate several technologies to realise the benefits.
Solution Match your technology to your market, identify a market where
your technology can deliver benefits to customers and seek to
solve customer problems completely. To do this bundle your
generic product with any additional products and services are needed
for customers to recognize the promised value from the product.
Market the complete package to customers in your chosen market.
Continually seek to identify the obstacles that stop customers from
maximising their benefit from the product. Remove each obstacle
either by changing the product or supplementing the offering with
extra products or services.
Differentiate yourself from technology peers by addressing the
needs of a specific market. If the product needs additional hardware
then bundle the product with the necessary hardware. If additional
software is needed to interface with other systems then supply the
software. If integration services, training or support are needed then
supply these – use CONTINUING PRODUCTS FOR SERVICES. You may
choose to supply these products and services yourself or you may
enter into partnerships with others who can supply them.
Direct your marketing effort at your chosen market. Advertise to
this industry, attend their shows, sponsor their industry awards – be
part of that industry. Show how your technology is better than
competitors because you cater for the market needs and solve their
problems.
Be clear about the problems your product solves, before adding or
changing anything about the product ask: Will this help solve the key
problem? Rather than think of your product as a set of features
think of it as a single solution.
Creating a whole product and matching customer needs is not about
selling more accessories and services around your product, it is
about making sure your solution solves a customers problem and the
customer recognises value from your product. Taking features out
of your product may help the customer reach these objectives too.
For example, a product cluttered with features for customers outside
the core market may make the interface or installation more
complicated
Consequences Your technology is applied to a specific problem in a specific market
– sometimes called a market vertical. The core technology product
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Business Design Patterns for Product Development 12-May-09
is augmented in such a way that it fixes this problem perfectly, you
sell a whole product, not a technology.
The technology is hidden, removed and sometimes simplified so that
the product application represents a complete solution. The benefits
of this solution are available far beyond the technology enthusiasts.
The value of your whole product is clearly spelt out by defining the
tasks it will perform and the benefits it will provide. Focusing on the
benefits and final product you actively set out to remove all barriers
between customers buying the product and seeing the benefits.
You will differentiate yourself from competitors with similar
technology who do not focus on your chosen market. You will be
able to point to similar technology from competitors and explain
why they cannot deliver the benefits you do.
Being the first to bring new technology to a specific market will give
you a head start – so called first mover advantage. It will also give
you a chance to define the market and product offering. Even if you
do not have first mover advantage in the market, or with the
technology, you can still define a niche were you will serve
customers better than any competitors.
Choosing your niche, and focusing your technology into a product
for a specific market vertical limits the size of your market. Instead
of targeting a wide and shallow market you are aiming narrow and
deep. Once you have dominated one vertical market you can repeat
the exercise in another market adjacent to the first one. It is easier to
tackle one vertical at a time than attack on a broad front.
As your product offering grows you will be able to justify a higher
price. Fixing a specific problem in a market will help identify the
value, and thus price, of your product. When your product offering
contains an ongoing element (e.g. technical support or operations
management) you will be able to charge regular fees. The fees are
not only an additional source of revenue they are more predictable.
Such fees will add to your company value because they are
considered ‘high quality’.
Focusing on a specific market or market segment will mean passing
over sales prospects in other area. This is necessary to create true
focus but may lead to some difficult decisions, particularly when the
sale in prospect is big. Continue to chase deals outside your core
market will dilute the focus.
An established company adopting a whole product strategy will need
change its own structure and organization. People working to
support non-core markets may need to be redeployed or even laid-
off. Existing customer in non-core markets also present a problem,
whether it is better to continue supporting them or withdraw your
product will depend on your exact relationship with the customers.
Providing services as part of a product offering can cause conflicts
in product development and quality management. See the
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Business Design Patterns for Product Development 12-May-09
discussion in CONTINUING SERVICES FOR PRODUCTS (Kelly 2005b).
Variations It is preferable to stop selling the generic product on its own. This
will help focus your marketing message, simplify pricing and
remove the danger of competing with yourself. But withdrawing
from markets, or not allowing customers to mix and match your
product with other “best of breed” may harm some of your
prospects.
Examples See Crossing the Chasm (Moore 1999) for a longer discussion of
whole product strategy and numerous examples including: Silicon
Graphics, Intuit and Documentum.
Also known -
as
Related work A WHOLE PRODUCT strategy is the opposite of a CORE PRODUCT
& Sources ONLY (Kelly 2005a) approach. Both strategies may lead to SIMPLER
PRODUCT (Kelly 2007b).
Lean Solutions (Womack and Jones 2005) advises suppliers to
“Solve my problem completely.” That is, provide solutions to
customers entire problem not part of the problem. Such an approach
would naturally lead to a WHOLE PRODUCT strategy.
(c) Allan Kelly 2007 – www.allankelly.net Page 11 of 24
Business Design Patterns for Product Development 12-May-09
3.3 PRODUCT PORTFOLIO
Figure 4 - Nokia Phones
Few large companies sell just one product, Nokia sell a range of
phones to suit all tastes and budgets. You can choose between a
small 6300, a large N95 with a hard disk or a Blackberry like E61.
Context You have successfully used SINGLE PRODUCT COMPANY and WHOLE
PRODUCT. It is time to grow the company and you are building
SAME CUSTOMER, DIFFERENT PRODUCT.
Problem How do you decide which products to continue selling, which to
introduce and which to discontinue?
Forces Company strategy is no longer synonymous with one product. Your
new strategy needs to encompass multiple products. But your
resources are still limited and your potential products all demand
resources. Some trade-offs and compromises are necessary but
nobody wants to loose resources.
New products need time to demonstrate significant sales but demand
development resources. Old products might be profitable but they
are near the end of their life and vulnerable to competition. Even if
you do not wish to grow the company you still need to consider new
products. Customer needs and tastes change over time. Products
age in the market – competitors enter and new technology change
production options. Introducing new products, changing existing
products and retiring old products all takes time, money and effort.
You need to decide how to allocate your resources between these
activities and how to reduce risks.
Being a single product company has brought you success but you
now need to grow the company. Maintaining focus on one product
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Business Design Patterns for Product Development 12-May-09
brought success but, by definition, you cannot focus on too many
things.
What is in the best interests of the portfolio may not be in the best
interest of a specific product, and vice versa. Tension arises
between products serving one market and products serving another
market. More tension will arise because products are build by
different teams, decisions about individuals effect the portfolio and
vice versa.
By following WHOLE PRODUCT you now have a cluster of product
around the original product. But as this cluster grows, and as more
different products are added it is difficult to see the common
elements. Each additional product – or service – requires
management attention; the same managers have more work to do.
Solution Instead of managing each product as a single product manage
the collective product portfolio. Delegate management of
individual products to specific teams and managers. Each product
line can then focus on its product(s) while company management
should then focus on the overall portfolio of products.
This is easier said than done. There are many criteria and conflicts
to manage. The portfolio needs to balance the need for an orderly
introduction of new products and retirement of old products, and
balance the customers need for a range of products to choose from
and switch between.
There are many criteria that may be used in creating a product
portfolio so it pays to define your criteria before evaluating the
portfolio. Criteria need to be based on company goals and
objectives, risk aversion, approach to innovation, cost of producing
new products, customer need and many other factors.
With the right criteria in place the portfolio will reflect company
strategy. If you are driven by near term profits then all your
resources should be put into the most profitable products.
Conversely, if you are looking for growth you may tolerate loss-
making products that may bring in new customers and growth in the
medium term.
For some companies the customer’s need for a selection of products
will dominate, for example Nokia’s mobile phone range. Or
companies may offer customers a range of products for the different
stages of their lives, so Ford Europe offers the small Fiesta car for
young drivers, the Focus for couples with young children and the
Galaxy families.
Other companies may need to balance aging products against new
introductions will be paramount. Stability and continued support
may be important in some sectors while innovation and fresh
products are important elsewhere.
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Business Design Patterns for Product Development 12-May-09
Your product portfolio needs a unifying theme, or core competency.
The theme may stem from your capability with some technology, or
from servicing a particular type of customer, or solving a certain
type of problem.
When constructing the portfolio consider how customers needs
differ, why they might change, what they will need (or want) next
and provide a product. By covering a variety of positions you have
multiple products to offer your customers as their needs develop and
change.
Both the criteria used to evaluate products and the methods used to
manage the portfolio are large topics and outside the scope of this
pattern. Two approaches to constructing a portfolio are detailed in
the side-boxes Vertical and horizontal portfolios and BCG Product
Growth Matrix. Many other approaches are possible.
Consequences Setting portfolio criteria and positioning products against each other
will highlight product priorities and inform resources allocation.
The portfolio view will help balance product introduction and
retirement by showing product lifecycles. This in turn will help
reduce risk.
Studying the portfolio as a whole will help identify gaps and
opportunities for new products. You will also see product overlap
where one product is stealing sales from another. You can also see
products that are in decline; these may be revived by further
investment or milked for further sales without investment.
Introducing new products can offset slowing sales of an aging
product. Alternatively you may be able to rejuvenate the aging
product by offering it into a different market segment.
By offering a selection of products you can retain your hard won
customers as the look for new and different products. When you
have a relationship with your customers they will want to do
business with you again; and when you sell them more products you
will strengthen the relationship.
Company strategy is now concerned with a range of products you
offer and how those products relate to one another. Each product
group can continue to focus on their product while you focus on the
portfolio.
Tensions between different products, and between individual
products and the roadmap or company strategy, are easier to
recognise even if they cannot be resolved.
Rather then focusing on a whole product you are looking at the
whole company. Delegation becomes possible and individuals can
be allowed to focus on individual products.
A balanced portfolio will allow you to invest in new products and
take risks with the products you develop and introduce without
jeopardising the security of the company. The portfolio will also
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Business Design Patterns for Product Development 12-May-09
allow for the organized retirement of older products so customers
can be migrated to new products and support wound down.
Without a unifying theme your portfolio, and company, will start to
resemble a conglomerate. Although conglomerate’s have advantages
they often trade a discount when listed on a stock market.
Portfolio management can lead to sub-optimal decisions for
individual products. Some products may be held back for fear of
damaging others or cannibalising sales. Competitors may be able to
exploit such gaps by introducing their own products. For example,
IBM initially held back the PC so as not to damage sales of mini-
computers but competitors raced to enhance the capabilities of the
PC.
Variations The BCG matrix is a widely cited and critiqued example of a
portfolio management technique (see sidebar).
Examples Product portfolio abound, most large companies offer a range of
products.
Also known -
as
Related work Use Product Roadmap for each product then synchronise the
& Sources roadmaps.
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Business Design Patterns for Product Development 12-May-09
Vertical and horizontal portfolios
Portfolios may be vertically or horizontally, or a mix for both. In a
horizontal portfolio the products fulfil a similar need. For example, Dell’s
laptop portfolio, is arranged horizontally. The laptops are broadly
comparable but are alternatives aimed at different users: Inspiron is aimed at
home users and Latitude at business users. A buyer will choose the laptop
that best meets their needs but are unlikely to buy more than one.
Vertical portfolios are made up of products which link together. Buyers are
likely to buy several products from the portfolio to work together. For
example, IBM offers the Z Series mainframe, Figure 5, this runs the Z/OS
operating system, on which can be run the DB2 database and on top of that
Office Vision office automation software. In a vertical portfolio one product
leads to the next.
A WHOLE PRODUCT strategy creates a horizontal portfolio of products that
serve a specific need. The layers of the stack are unimportant to the final
customer who wants a solution to some problem. Each generic product will
have its own mini-portfolio of related products and services. Some of these
may be products in their own right if developed right.
Figure 5 - IBM offers a vertical portfolio of mainframe products
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Business Design Patterns for Product Development 12-May-09
BCG Product Growth Matrix
The horizontal and vertical view of the product portfolio describe how a
portfolio is presented to customers. Another way of looking at a portfolio is
the Growth Share Matrix, Figure 6, from the Boston Consulting Group
(BCG). This approach looks to maximise the return for the whole company.
Figure 6 - Boston Consulting Group's Growth Share Matrix
The matrix divides products into one of four categories based on whether the
company has a high or low market share, and whether the market as a whole
is experiencing high or low growth.
Companies that follow the matrix are advised to maximise their returns from
Cash Cows while minimising investments because the market is not growing.
Companies are advised to discontinue Dogs – low sales and little potential
growth - and invest in Stars that will produce profits in future. There is not
standard advice for Question Marks, those products which have potential but
are currently performing poor. These products require closer attention.
Such advice can be simplistic, particularly for small technology companies.
More detailed analysis may consider the profitability of products and their
role in providing for a Whole Product. An unprofitable Dog product may in
fact be providing vital support to another product.
One problem with the growth matrix can be defining the market. Crossing
the Chasm (Moore 1999) advise companies to define the market as narrowly
as possible in order to focus action and present the company as the market
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Business Design Patterns for Product Development 12-May-09
leader. Following this advice renders half the matrix pointless because we
have defined our market as a market we dominate. Thus there are no Dogs
or Question Marks. Conversely an expanding company may redefine its
market more broadly in a search for growth. At a stroke a Star product can
be turned into a Dog.
The question of market share and market definition can have a profound
effect on company action. During the 1980s General Electric famously
pursued a strategy of being ‘number one or number two’ in every market it
operated in. The company exited those markets were it could not achieve
first or second place market (Welch 2001). However one way to achieve
leadership was to define the market narrowly. In doing so the company
could miss profitable opportunities in a wider market.
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Business Design Patterns for Product Development 12-May-09
3.4 PRODUCT ROADMAP
Figure 7 – Near term product roadmap
“It's tough to make predictions, especially about the future.” Yogi
Berra, American baseball player and philosopher
”One of the biggest roles of science fiction is to prepare people to
accept the future without pain and to encourage a flexibility of
mind.” Arthur C. Clarke, science fiction writer
You can’t predict the future for your product but you need to base
your activities around a map everyone can agree on.
Context You have an existing product in the market. Now you have to tell
customers and staff how the product will develop.
Problem How do you plan for a product’s future, and communicate this
to customers, employees and partners when the world changes
so much?
Forces Without new products, and new versions of existing products the
company will not advance. Without a vision of what will be in
future products it is difficult to plan for the future and impossible for
your engineers to start building.
It is always difficult to foresee the future, but lots of people want to
know what your product will do in future. Your customers want to
know what your product will do in future. Your organization needs
to plan for the future, what resources will it need? When will it have
a new product? But you cannot answer their question with absolute
certainty.
Lots of disparate groups have an interest in knowing and suggesting
what the product should do in future, but how do you incorporate
their ideas? And how do you explain the result? The product will
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Business Design Patterns for Product Development 12-May-09
need to meet future customer needs, it needs to take advantage of
new technology, the product needs to fit with the company strategy
and will help shape future strategy.
A plan can be formulated from these ideas and opinions but plans
take time to develop and even longer to implement. During that
time things change, and some things take longer than expected.
Different groups might feel the need to create different visions of the
future. The Product Management group might create a roadmap
which addresses customer needs while research and development
create on that looks at future technology development. But multiple
roadmaps will fragment your future vision, they might even conflict
and may confuse customers.
Figure 8 - Roadmap creation
Solution Create a product roadmap to show a vision for the future. The
roadmap does not contain a lot of detail, it is more about vision than
execution, it shows where you are going rather than a detailed route.
Before building the roadmap decide who the stakeholders are and
find out what they want from the product in the future. Customers
are the most obvious (and important) stakeholders, the actual users
of the product are important too – often, but not always, customers
and users are the same people. People in the company will also have
needs and suggestions that will be useful.
Divide the roadmap into time-buckets, perhaps by year quarters or
by ‘next three months, 1 year, 5 years’ – whatever division works
for you. Put different objectives in different buckets and keep
timescales vague.
When there are lots of enhancements, features and changes to make
group them into themes. Each theme should address a specific
aspect of the customers problems.
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Business Design Patterns for Product Development 12-May-09
Mark key events and dates on the roadmap too. For example, trade
shows you wish to exhibit at, legislation changes, important
financial reporting dates, anticipated competitor actions and dates
important to your customers.
Show the roadmaps back to the stakeholders and listen their
feedback. Present the roadmap to the whole company and listen
again. Use their feedback to change the roadmap. Roadmaps are
living documents and subject to change. Expect to update your
roadmap at least quarterly, certainly not just for the annual report.
Incorporating different groups and listening to feedback will help to
bring everyone in the company to agreement on a single roadmap.
Technology development and customers needs can – and should –
be shown on a single map which is simple to understand. Careful
attention needs to be given to timelines so technology introductions
and changes can be made.
Avoid making commitments based on the roadmap, you will need to
commit to some things, for some dates, but the majority of the
roadmap needs to be flexible. (Work might take longer than
expected or needs may change.) The closer something is on the
roadmap the more definite it is. Items that are further away (e.g. five
years out) may be removed long before the date shown.
It may not be wise to show customers your full roadmap. Such a
roadmap may contain information you don’t want them to have, e.g.
features for their competitors. You may wish to show customers
versions of the roadmap which emphasis the things they are
interested in, and hide other elements. Avoid these problems by
never letting a sales person conduct a roadmap presentations alone.
Consequences The roadmap provides the future vision for people to work towards.
It is always a best efforts map because things always change.
A roadmap describes one version of the future and provides a base
for further discussion. Some psychologist call this a transient
object. You cannot tell the future exactly but the roadmap allows
you to talk about and plan.
The roadmap, the picture, accompanying documentation and verbal
description are the result of many inputs. Some people will
immediately see their suggestions, others will need to be shown.
Some suggestions will be absent from the roadmap because it is not
possible to satisfy everyone. The roadmap will allow you to explain
what was left out and why. If every idea is included the roadmap
will be impossibly large and complicated. What you leave out is
may be more important than what you include; there are always
some requests which are best turned down.
Creating a single roadmap which reconcile different departments –
such as marketing and R&D – will create a unified vision across the
company.
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Business Design Patterns for Product Development 12-May-09
Developers can start work on developing the products and features
on the roadmap. Although items on the roadmap will change there
will be enough certainty at the start of the map to start work.
Regular updates between roadmap owners and developers will be
needed to accommodate changes on both sides.
Salespeople can use the roadmap to sell products by promising
features. This can help improve sales but can be problematic when
sales people sell features that are later delayed or removed.
A roadmap will raise expectations and perhaps inevitably form the
basis of commitments and when a roadmap changes some
commitments will be broken. Sometimes this is difficult to avoid
but when commitments are being broken on a regular basis it is a
sign something is wrong. Look for the underlying reason: perhaps
the roadmap is being interpreted too literally, perhaps sales people
are over stepping their authority, perhaps you planning and roadmap
creation process needs to be improved, perhaps the development
team needs more resources, or perhaps you too optimistic.
Roadmaps can be used to sow fear, uncertainty and doubt and to
retain customers with promises of new features. This should not be
the primary use of a roadmap.
Roadmaps show priorities so adding a new theme or feature means
deciding its priority relative to other items. Conversations about the
roadmap quickly turn into conversations about relative priorities –
and shows there is no free lunch.
Variations
Examples
Also known -
as
Related work The author has worked with several ISV who have successfully used
& sources product roadmaps.
Creating the roadmap is a learning exercise, as it is created you will
be forced to think about the future. Once created the roadmap is also
a learning tool to help stakeholders learn about the future and
consider options. A roadmap may be considered a scenario for the
future.
Scenario planning (Schwartz 1991) is a well developed field and you
might borrow some techniques. For example, try creating several
roadmaps and select the most promising, Once a roadmap is
selected the organization sets out to build the product described.
If you also following Product Portfolio remember to synchronise
your various roadmaps where necessary. It may also be useful to
produce a high-level portfolio roadmap.
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Business Design Patterns for Product Development 12-May-09
Acknowledgements
Many thanks to Klaus Marquardt for shepherd this paper to EuroPLoP 2008
– one would think after two of these papers he would have had enough but he
came back for a third. Thanks too to the participants of Workshop C at
EuroPLoP 2008: Valerie Brown, Gwendolyn Kolfschoten, Stephan Lukosch,
Lotte De Rore, Dinesha Koravangala, Birgit Gruber and Andreas Fiesser.
Figure 1 - Pattern sequence: author’s own illustration.
Figure 2 - 1908 Model-T Ford: from Wikimedia, copyright expired, public
domain image
Figure 3 - The whole product doughnut: Wikipedia, version 1.2,
http://en.wikipedia.org/wiki/Image:Marketing-whole-product.png. Published
under GNU Free documentation license
Figure 4 - Nokia Phones: Copyright Nokia 2008, taken from nokia.com press
section, pictures for media use.
Figure 5 - IBM offers a vertical portfolio of mainframe products: author’s
own illustration.
Figure 6 - Boston Consulting Group's Growth Share Matrix: author’s own
illustration based on Wikipedia illustration, GNU Free Documentation
License.
Figure 7 – Near term product roadmap: author’s own illustration.
Figure 8 - Roadmap creation: author’s own drawing, includes images from
iStockPhoto (purchased) and Inspiration software.
History
Date Event
August 2008 Workshop comments incorporated
July 2008 Workshop review at EuroPLoP 2008
March – June 2008 Shepherding revisions
January 2008 Revisions for submission to EuroPLoP 2008
December 2007 First draft
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